Varonis Systems, Inc. reported its financial results for the third quarter and the first nine months of 2025, revealing a total revenue of $161.6 million for the three months ended September 30, 2025, a 9% increase from $148.1 million in the same period of 2024. For the nine months ended September 30, 2025, total revenue reached $450.2 million, up 15% from $392.4 million year-over-year. The company's SaaS revenue surged significantly, increasing by 118% to $125.8 million in Q3 2025, and by 135% to $320.3 million for the nine-month period, reflecting the successful transition to a SaaS delivery model.
Despite the revenue growth, Varonis reported a net loss of $29.9 million for the third quarter, compared to a net loss of $18.3 million in Q3 2024. For the nine months ended September 30, 2025, the net loss was $101.5 million, up from $82.8 million in the prior year. The increase in losses was attributed to higher operating expenses, which rose to $162.4 million in Q3 2025 from $147.7 million in Q3 2024, driven by increased investments in research and development, sales and marketing, and general administrative costs.
In terms of operational metrics, Varonis reported an Annual Recurring Revenue (ARR) of $718.6 million as of September 30, 2025, an 18% increase from $610.0 million a year earlier. The company also noted that approximately 76% of its total ARR now comes from SaaS offerings, marking the completion of its transition from traditional licensing models. The company’s renewal rate remained strong at over 90%, although it experienced weaker renewals in its term license subscription business, which is set to phase out by the end of 2026.
Strategically, Varonis completed two acquisitions in 2025: Cyral, a database activity monitoring software provider, and SlashNext, an AI-native email security provider. The total cash paid for these acquisitions was approximately $129.4 million. These acquisitions are expected to enhance Varonis's product offerings and market position in the data security sector. The company also initiated a share repurchase program, authorizing up to $150 million for the repurchase of its common stock, following a previous $100 million program completed in April 2025.
Looking ahead, Varonis anticipates continued growth in its SaaS revenues, driven by new customer acquisitions and existing customer conversions. However, the company acknowledges potential revenue fluctuations due to the transition from term licenses to SaaS and the associated accounting treatment differences. The management remains optimistic about expanding both domestic and international markets, despite the challenges posed by economic conditions and customer spending patterns.
About VARONIS SYSTEMS INC
Varonis Systems, Inc. provides data security software that helps organizations protect, monitor, and manage enterprise data across on-premises and cloud environments. Its platform automates risk detection, access control, compliance, and threat response, leveraging proprietary metadata analysis and AI capabilities. Serving diverse industries worldwide, Varonis focuses on large enterprises to prevent data breaches, ensure regulatory compliance, and address growing data security challenges through scalable, integrated solutions.
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